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Why you should use a tax attorney for the appeals process

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Why you should use a tax attorney for the appeals process

Date: 07/05/09

Topic: Appeals

Anyone that is licensed to practice before the IRS, including CPAs & EAs can represent a taxpayer in an IRS appeal. I am of the opinion that a Tax Attorney is better suited to represent a taxpayer before the IRS in an appeals proceeding because Tax Attorney’s are legally trained and in a much better position to assess the relative strengths and weaknesses in a client’s case.

Because the appeals process is the last step before litigation and it has been said that 70% of taxpayer’s loose in tax court. It is really imperative that a client be represented as advantageously as possible in what is basically a negotiation with the IRS.

The IRS appeals officer is not likely to entertain a settlement offer for less than the amount that was established under IRS examination unless taxpayer’s counsel has created some doubt as to the likelihood of the IRS prevailing at trial.

The strongest motivation on the appeals officer to settle are the “hazards-of litigation” and I am of the opinion that a tax attorney is in the best position to assess these hazards and use them to the client’s advantage in attempting to settle the case. The IRS will not settle the case for less than the amount the IRS was originally seeking unless the client’s Representative is able to show that there is substantial certainty either in law or fact as to the correct application to the whole record in the case.

To evaluate the settlement possibilities of a case properly, the Appeals officer is instructed to consider the following:
Probative value of the evidence likely to be presented
Credibility of witnesses (e.g., the taxpayer)
Availability of witnesses
Ability of the taxpayer to carry his burden of going forward with evidence
Likelihood that the evidence the taxpayer can present will carry his burden of proof
Doubt as to an issue of fact
Doubt as to a conclusion of law (e.g., the law in the circuit to which the case will be appealed or in which it will be tried)

Because of the factors the appeals officer is instructed to consider listed above, much of the Appeals officer’s analysis focuses on the evidence available for presentation in court.

Of the Tax Professionals available to represent a taxpayer in the appeals process, the Tax Attorney is by far the better choice to represent a taxpayer because of the legal training one receives to become an attorney and the attorney’s ability to best assess the relative strengths and weaknesses of the above factors. Moreover, attorney’s are the only professionals that are trained in the art of legal persuasion and are therefore much more likely to arrive at an advantageous settlement of a client’s tax assessment though the appeals process without incurring the expense of going to tax court or exposing the client to a 70% probability that they will loose in tax court because they are forced to bear the burden of proof that the IRS’s examination findings are erroneous.